AMMAN, Jordan--Even by the extremes of the Middle East, Jordan is an unusual place.

Unlike its neighbors to the south and east, it enjoys no vast oil wealth. It shares the region's longest border with Israel, about 150 miles, and signed a peace treaty with its neighbor in 1994. Although the northern third of the country benefits from a Mediterranean climate, the rest is largely desert.

That leaves outsourcing and other businesses as one obvious bright spot, and Jordan is hoping to enlist computer technology and the Internet to fight an unemployment rate that probably hovers around 30 percent, thanks in part to the hundreds of thousands of Iraqi and Palestinian refugees the country has taken in.

Embracing the Internet also means trying to reconcile its rollicking, unruly culture of free expression with a population that's about 92 percent Muslim and a society that's far from as strict as neighboring Saudi Arabia -- but nevertheless conservative enough to prompt most women to follow the dictates of the hijab by wearing head scarves.

Jordan has had flare-ups of offline and online censorship, including imprisoning a female member of Parliament (since pardoned by King Abdullah) and encouraging bloggers to self-censor. Reporters Without Borders says that even though a law providing for prison terms for press offenses was canceled, journalists remain under pressure.

Then there are the less expected obstacles, like a proposed tax earlier this year of about 1.5 cents per minute on wireless calls, with the proceeds going to the livestock industry to subsidize animal feed.

CNET News recently met with His Excellency Eng. Bassem Al Rousan, minister of information and communications technology of Jordan, in his offices in Amman, to talk about outsourcing, DVD piracy, Internet taxes, open source, and other topics.

Q: If a Jordanian company opens an office in Lebanon, it can't easily send Jordanian engineers to work there. And company in Lebanon can't easily send engineers here. Is there any interest in eliminating some of these legal barriers?
Al Rousan: In Jordan now the unemployment rate is about 12 percent... It is not difficult for technical jobs, marketing jobs. It's easy to come and work in Jordan.

I started working in the private sector in 1997. I saw very easy movement from Jordan to Egypt, Lebanon, Pakistan, the Gulf. Also Pakistanis coming to Jordan. It's easy because we consider those jobs vital for the development of businesses. The movement for skilled jobs is easy.

If Internet access is more expensive in Jordan than Europe in absolute terms, and far more expensive in relative terms, what's the best way to bring down the monthly cost? Does the government need to subsidize it, or encourage competition instead?
Al Rousan: To increase the penetration, there are some obstacles we have to overcome. One of those is the language and the content. Just last week we had a talk with Google about Jordan investing in Arabization for the content. (Editors' note: Al Rousan's aide said afterward that this involved sharing of knowledge and was not a financial investment.)

Another thing is the price of computers. We started in the government a new initiative, what we called a laptop for every university student. He can buy a laptop with no taxes on it. He can pay for this computer for four years, about 15 dollars a month.

When it comes to the Internet, we used to have a monopoly in the fixed network. Now we are working on this... Last week a company named Meta launched their services -- WiMax, based on Motorola. And the prices are OK now. Comparing the prices of 2007 and now, they're less than 50 percent of what they used to be. The government also reduced the sales tax on the Internet from 16 percent to 8 percent. I have a meeting with the minister of finance -- next week I will meet with him to try to get him to reduce it to zero. Also the tax on computers will be zero.

What we're doing is infrastructure, building a fiber-optic network that will reach all the schools. We will use it to provide Internet service to the villages. We will ask the ISP operator: Go to these schools and use it as a connection point that you can distribute to the houses in the village.

What's the status of 3G wireless, which has been delayed a few times?
Al Rousan: The regulatory body for telecommunications is conducting an auction for the spectrum, for 3G. Hopefully by the end of (April) they will finish this process and they will be able to distribute the spectrum for the operators. It could be new operators or existing operators using it.

We've also started talking to some techical companies, like Qualcomm, about a computer that costs less than $100, which connects to 3G wireless. You have a keyboard only and it connects to the television and you can be connected to the Internet. It's cloud computing -- subscribers can use it instead of having a sophisticated computer.

"Watchmen" and other pirated DVDs are on sale in Amman, Jordan, for a little over $1 each
Declan McCullagh

If I have my numbers right, Jordan's official goal is to have an Internet penetration rate of 50 percent by 2011. Are you on track?
Al Rousan: As of 2008, penetration of the internet is over 24 percent. Revenue in the sector is over $2 billion. The number of employees working in this sector is about 22,000.

I know you've attracted investment from companies like Microsoft, and as of 2005, at least, foreign direct investment was around $100 million. What's your plan to increase this?
Al Rousan: What we are doing actually is the cabinet agreed to have a new (free-trade zone) for the telecommunication and IT, which starts by next year. They're started to develop it. In Amman, we think that having such an area will be very attractive especially now if you're comparing Jordan to the other countries around us, in many aspects from manpower, education, security, the price of real estate, and so on. The other thing which is very important is that most of our engineers work outside Jordan in the Gulf area. Now our plan is to bring them back, and instead of sending them there, have business come to Jordan.

We are now focusing on more businesses like call centers, for instance, which will serve banks, insurance companies, in the whole area, in the Gulf.

Will these be in Arabic or English?
Al Rousan: Both. And in Spanish. One company has a section that serves the Spanish language.

One of the biggest advantages in Jordan is the accent. In English and Arabic, we have a neutral accent. Here, especially in the Gulf area, our accent is almost the same as their accent. The other area we focus on is technical support and maintenance, having a technical center here in Jordan that will support companies and products like Cisco, for instance. They have a tech center here that employs about 80 IT engineers supporting the Gulf area. And part of southern Europe.

I believe the U.S.-based Web site ArabTimes.com is blocked because of its political content. How do you reconcile this with a liberal approach to Internet regulation-- will sites like ArabTimes.com continue to be censored by the government?
Al Rousan: There is a new law for telecommunications and audio visual services. The two entities will be in one law. According to the law there will be no censoring of the Internet.

When will this take effect?
Al Rousan: It is already in the law that the Internet is not censored. I think most of the government knows they cannot block it. It's a waste of time and money. This is what our policy is, not to try to do this. The problem we are facing is to convince many of the families, many parents don't want the Internet because they're afraid for their children. They want to guide their children and to tell them what to do or not to do.

But tomorrow or the day after they will go to their friends or an Internet cafe. It's better to have it in the house. The family and the government, we cannot stop those things. We have to deal with it in a different way. If you're a family, you have to educate your children.

Now we have a political Web site where they write many things, much of it good, much of it bad, depending on rumors. Nothing solid. There is no law which will excuse them for publishing such things on the Web site. Should these journalists be prosecuted? There's a debate over whether the law should apply.

The Wall Street Journal and the Heritage Foundation publish an annual index of economic freedom. The survey says Jordan doesn't have a higher rank because it's too difficult to start a business, too difficult to close a business, the size of the government is too large, and there are restrictions on foreign investments over 50 percent in many sectors. Is this a reasonable criticism?
Al Rousan: The government tries to do their best to make this easier. There's a Parliament -- how do you deal with a Parliament that imposes taxes on telecommunications to support animal feed? They want to impose a tax on telecommunications to support animal feed. We managed to stop that. I'm trying to make you understand that Jordan is still a new country, historically. We're still not that educated about business and what it can do. So it's not always easy to make things happen.

You mentioned that foreign investors can't own more than 50 percent of a company. Yes, they can. They can go through the Cabinet. Every month we approve some. According to the law it's 50 percent unless the Cabinet approves, and we do that. The government is in favor of making things easier but the Parliament -- there are two forces opposing one another.

I agree with you, to start a business it's difficult. But once you're in the system it's smooth.

And this will be easier with the free zones, less regulation in general?
Al Rousan: Exactly. This will be used for industry, shielded from bureaucracy.

In downtown Amman yesterday, I found pirated DVDs of movies such as the Watchmen on sale in storefronts for 1 Jordan dinar (about US$1.41). My relatives here in Jordan told me I overpaid and could have found them elsewhere for about half a dinar. What's the government's view on commercial sale of pirated videos?
Al Rousan: You can read in the newspaper there's a raid, that they've confiscated these products. We signed an agreement with Microsoft, signed an agreement with Oracle...

What about not software licensing inside government agencies, but enforcement of copyright laws in general?
Al Rousan: Not just in the government, but outside as well. Now we're trying to establish an IT industry here. This is very important for us also. The law is very strict on these things. One way or another you cannot stop people from importing these...

Are you talking about imports from Syria?
Al Rousan: Syria and other places. You can also download them over the Internet. But the government is very strict: we get hundreds of millions of aid every year from the United States.

Under Jordanian law, is there a difference between pirated software and pirated DVDs?
Al Rousan: No, it's the same. It protects both. It's like the drug trade. You can try to stop it, but you cannot do it. There's always a way to get around it.

Is Jordan planning to adopt open-source software in government agencies?
Al Rousan: It will cost you more, by the way. We are working in the hospital sector, using open source. I think that in the beginning, the cost will be higher. In the long run it could be better.

You have to develop software to interface with the open source, which will cost you more. A country like Jordan cannot afford such things.

Any last thoughts?
Al Rousan: I think here in Jordan, the seeds are here. It needs somebody who can use it to get to harvest. A company whose operations in an area are very expensive, they can come to Jordan and find everything they need. In jordan, we have more than 6,000 graduates a year in information technology. Jordan doesn't have natural resources, so we depend on people. Software is one of the things that can succeed in Jordan.

About the author

Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.
See full bio